The remarks by Brazil’s Secretary of Civil Aviation, Dario Reis Lopes, at the LABACE show opening session included a specific reference to easier expansion of the fractional-share aircraft market in the country. Rogério Andrade, president of fractional share pioneer and aircraft management company Avantto, speaking to AIN later in the show, explained, “Specific legislation will be approved by the end of the year, modeled on FAR 91 [Subsection] K”–the U.S. rules governing fractional share programs. “Avantto made several contributions to the [new Brazilian] legislation,” he confirmed.
The initial introduction of fractional ownership to Brazil was hampered by a lack of legal provisions, which could have left every fractional owner fully liable in the event of an accident. “Avantto’s legal model avoids shared ownership risks,” Andrade claimed, “But there will be no more uncertainties of any sort” once the legislation, underway since early this year, is finally in place.
While some other “shared asset” programs divide a specific aircraft among several joint owners, Avantto’s model is more abstract. “There will always be an aircraft available, if you request with the contractually specified advance notice,” Andrade said. So aircraft availability is “independent of [scheduled] maintenance or the crew being off-duty,” he added.​​
Share Trade-in
Avantto’s growth over the past year, despite the deep economic recession and political uncertainty, comes from adapting both its business and marketing strategies to the crisis. “At an economic moment where austerity is being preached, having an aircraft or helicopter of your own sitting in a hangar doesn’t fit the model of austerity.
“We’ve been spontaneously approached by businessmen who want to keep flying, in line with the demands of the moment,” said Andrade. He pointed out that Avantto’s customer base is fairly evenly balanced between businesses and individuals. “But even there, there’s mixed use, with clients using their shares both for business and leisure.”
The business stratagem for the crisis is to take an aircraft in trade, for sale overseas. The owner immediately is enrolled in the share program, paying only once the aircraft sale in consummated. “The client substitutes a high fixed cost for a more moderate monthly cost. The fixed cost tends to be more of a problem than the cost of acquisition,” Andrade observed. Avantto’s partner to broker the aircraft taken in trade is Montreal-based Acass, with Javier Vélez, sales director for Mexico, being present at LABACE.
A Rising Tide?
Avantto is not the only fractional sales company in Brazil, with giant Lider Aviation entering the market this year with a program it calls “Lider Share.” Will the new legislation undermine Avantto’s advantage? “Lider is a competitor that demands respect,” Andrade said, “But what the new legislation will do is grow the market. Netjets was the pioneer in the US, and stayed considerably larger than its competitors.”
The Avantto shared fleet is composed of 65 aircraft (27 helicopters and 38 jets). The helicopters are of three models: the Airbus Helicopters H120, on display at Avantto’s stand; Airbus Helicopters H125; Leonardo (AgustaWestland) A109E Power; and Robinson R44. The fixed-wing aircraft are Embraer Phenom 100 and 300 light jets.
